The following questions are based on the Coca-Cola Company”s 2006 annual report. To view the report, go to the Coca-Cola web site at After you activate the web site, click on The Coca-Cola Company. Go to investors and a menu will drop down that has financials as an option with Financial Statements (select this) to its right. Click on Balance Sheet and then open it to find the total cost of treasury shares. Then go to Selected Financial Data and open it to find the number of common shares outstanding.
a. Based on the information in the balance sheet and the note, determine the number of common shares outstanding; and the total cost of treasury stock shares on hand at the end of 2006.
b. In writing, discuss what reasons Coca-Cola might have to acquire treasury stock.
c. Find Coca-Cola”s basic EPS for 2006 listed in its Income Statement. If the common stock”s market price at 2006 December 31, was USD 30, what was the price earnings ratio?